Artificial Intelligence – what’s in store for the Accounting Profession

The involvement of ‘Artificial intelligence’ is on the rise in a lot of areas touching our lives and the accounting profession is no exception. Artificial intelligence is being used to enhance human creativity through cognitive technology, enabling innovation across industries and bringing with it fundamental changes along with opportunities and threats.

Some predictions and research studies have gone to the extent of announcing that accountants have about 95% probability of losing their current jobs as computers and machines take over the task being carried out by them for many decades -number crunching and data analysis.

There is no denying the fact that technology in the form of Artificial Intelligence is here to stay and those getting affected by it will do well to embrace rather than ignore it. However, the reality, at least in the short to medium term may not be as stark as the prediction above. This phenomenon is definitely new, but technology has historically eliminated some jobs and created a few others. The profession was faced with a similar quandary when Computing Machines took over the tasks carried out by accountants. The traditional accountants then thought that they were in real danger of losing their jobs; which didn’t happen. What happened instead was that the same set of accountants got trained in the new technology, hence altering the typical nature of their jobs. Sure, some feathers were ruffled and those who couldn’t adapt lost their jobs but it was a transition that happened according to the need of the hour. The change this time in terms of Artificial Intelligence taking over is more real, yet manageable.

Artificial Intelligence has the potential to completely transform the accountancy profession. The future will offer smarter applications that drive value for accountants and their clients. It is bringing higher convenience for the profession as it helps to reduce transactional and routine tasks such as data entry, book-keeping and compliance work and allows accounting and finance professionals to focus more on value-added services. One view, and rightfully so is that the more repetitive bookkeeping or process-driven tasks are more likely to be taken over by automation as compared to the high-value tasks.

Gradually, Artificial Intelligence has become an essential part for the day to day activities of professionals, insurance underwriters, tax preparers, loan officers, credit analyst of the technology industry.

Whenever a change of a magnitude such as this takes over, it is always split into 2 smaller worlds-one the bigger organisations and the bigger audit firms and the other represented by the smaller companies and the smaller practices. It is often felt that the smaller organisations, represented typically by centralised controls, not too many segregation of duties and lesser reliance on IT controls may not understand the nuances of such  a change and may be left behind. However, things are not as they appear. The small firms have realised that if they do not adapt to the changing times, there is a huge risk of not being able to catch up ever. Technology has finally caught up with the audit and accounting firms of all sizes and they realise that they must keep up with the technology trends to remain relevant in the marketplace.

Some in the audit profession believe that Artificial Intelligence platforms will be a boon for them as it will enhance the quality of audit. The efficiency of audit will go up with a lot of technology at disposal and more insights can be obtained thus.

In the scenario given above, there may be an opportunity for universities to have a re-look at their curriculum and train the students for the future. The employers may soon start looking for technologically trained accountants, which may not exactly replace the accountants or reduce their chances of getting a job, rather it will shift the balance in favour of the more suited and technologically trained candidates.

We all were witness to how the automation of accounting jobs became of such strategic value to the profession in the field of finance shared services industry. The accounting as well as audit may well happen in a back-office in India for a transaction that took place elsewhere, even at an overseas location for that matter. All this bodes good for the onboarding of Artificial Intelligence in the near future.

Specialized software already automates many accounting, tax, and audit data-gathering and processing tasks and provides the results to professionals who use their professional judgment to review. With software automating many of the manual tasks, professionals can focus on delivering value operational advice to their clients.

In the modern days where everybody relies on computer technology, artificial intelligence has made things easier for commercial finance that requires information from across business divisions such as sales and marketing or logistics. With automation, they’ll be able to meet growing demand for quicker, more streamlined bookkeeping and valuable advisory services.

As mentioned earlier, Robotic machines can undeniably do a better job for transactional roles like GL accounting, accounts receivable and accounts payable, but other higher skill roles like financial planning and analysis or business controlling would continue to require human intervention at an advanced level.

There are limitations for use of Artificial Intelligence as well that include risk of trusting customised or non-customised software. Furthermore, cost is a big barrier to fully implement and extract the advantages of artificial intelligence in the corporate world. Computers are not completely designed to practice scepticism for which professionals must step in.

There is no doubt that in the coming days artificial intelligence will capture the world and will make work much easier than ever before, it will somehow have an impact on the jobs of the accountants and professionals as well. Nevertheless, technology will not be able to survive alone as it will require accountants to check its accuracy.

It is only the starting point in which industry leaders and technology pioneers must continue to create the right platforms and solutions that will drive success for all constituents in today’s digital economy.

Though Artificial Intelligence is here to stay, the accounting professionals need not panic as the technology is still in its young age. Digitalisation and some other related terms are becoming a jargon these days and though accountants to a large extent have gone digital, the digitalisation of jobs is still limited, even for the companies that are at the prime of their digital spending. It has been rightly said that “Accountants and professionals are to numbers what engineers are to machines.”

All in all, technology is still not completely ready to replace accountants, especially in providing advisory and strategic vision. There will never be a time when computers do everything and financial statement users just agree to the analysis without using their acquired thought process and wisdom. The users will always be reluctant to rely on information that hasn’t been audited by a professional of repute. We, like many others in the accounting profession believe that even if every single operation in the corporate world becomes automated, it will still require technically sound accountants to check the accuracy of work performed by the machines.

Puneet is a Partner with International Business Advisors (IBA). He is a Chartered Accountant with 13 years of post-qualification experience. He has rich experience in the field of accounting and auditing, due diligences and risk advisory to various mid-sized and large companies (Indian as well as trans-nationals) across various sectors. For most of his professional career he has worked with Big4 consulting firms such as KPMG and Deloitte.

In addition to heading the Assurance and Risk Advisory practice, he also leads the newly set-up Forensic practice at IBA.

He regularly writes on various accounting and auditing matters. For any professional assistance, he can be reached on Puneet.sharma@ibadvisors.co or at +91 98180 03353